Mark Radcliffe then took the stage, to argue IBM's position. As
you might expect, he started by saying that SCO hasn't given the
full story in some respects.

Mark framed his talk rhetorically around the phrase "strong
magic". SCO needs strong magic to make the claims that it's
making. Remember, this is a business that has failed twice, first
with Unix and then with Linux. He suggested that SCO's management
has asked "How can we turn this smoking crater into a business?"
How can we turn an antique Unix codebase into Unix code?

At its base, Mark explained that SCO's claim is a contract
dispute. The meaning of the contracts is vitally important. Though
the contracts are messy in some cases, they're very clear in other
cases.

Unfortunately, the contracts don't fully define what SCO bought.
They did buy the UnixWare business, but the contracts define it
unusually. They did not buy the copyrights, as they appear in the
original list of excluded assets.

Amendment 2, issued a year later, attempted to change this, but
being an exception to an exclusion, it's not clear. IBM believes
that the exception to the exclusion of copyrights does not apply in
this case. (This was difficult to follow, perhaps a sign that the
contracts are especially strange.)

One of SCO's biggest claims against IBM is that IBM violated its
confidentiality agreement with AT&T. However, SCO voluntarily
dropped its trade secret claim earlier this year.

Mark put forth the argument that claiming trade secret
protection for Unix is impossible. To keep a trade secret, you must
take reasonable steps to protect the secret and the secret must not
be widely known in the industry.

Of course, Unix is widely known. AT&T distributed
Unix widely before the anti-trust agreement 20 years ago. After
1984, when AT&T tried to make a business out of selling Unix, the
USL-BSD suit failed. Now that this confidentiality has gone, SCO
cannot retrieve it.

Mark continued with a series of explanations of why the
infringements do not apply. Even if they did, however, IBM supports
Novell's conjecture that Novell has the ability to waive
violations. Novell sent IBM a letter formally waiving any
restrictions on Unix on SCO's behalf. That's very important.

Even if there were a violation, Novell has waived it for
IBM.

For example, in Amendment X to the Novell-SCO agreement, IBM
acquired "perpetual and irrevocable rights" to Unix. Mark claimed
that IBM in fact has a statement from SCO explaining that
restrictions on the use and confidentiality of Unix do not apply to
IBM's code.

The biggest question so far is what kind of code could and did
IBM share with Linux. Is this actually Unix, or is it derivative code, to
which SCO can claim some rights?

SCO has made no statement as to which this code actually is. IBM
believes that Linux is not a derivative work of anything SCO can
claim copyright over. Even if it were, it wouldn't matter, as
Novell has waived any violations on SCO's behalf.

SCO has claimed the authority to terminate IBM's ability to
distribute AIX. Unfortunately, that flies in the face of IBM's
"perpetual and irrevocable" rights to distribute Unix. There's a
long history of contracts in which "irrevocable" has never meant
"revocable"--that's why IBM paid millions of dollars for the
license.

In any case, if there were a violation, Novell's letter has
waived it anyway.

Even if SCO didn't realize that it wanted to claim ownership
over Linux, it distributed Linux under the GPL voluntarily--the
very product that it claims violates its rights. Since SCO did
it voluntarily, it cannot rescind the permission it gave.

Besides that, consider that anyone who can demonstrate a
legitimate claim of overship to code distributed by SCO under the
GPL--which SCO now considers infringing--may have a right to
damages for SCO violating the GPL by putting additional conditions
on the code that the GPL does not allow.

As did Jon, Mark explained that the contracts at the heart of
this contractual dispute are somewhat odd. Again, Amendment 2 is an
exception to an exclusion that allowed SCO to assert its rights
if necessary. If they were truly important, why did SCO wait so
long?

Mark proposed that SCO didn't care until it entered the
lawsuit business, pointing out that SCO's lawyers had bet heavily
on the first version of Napster as well as Aimster. He left the
question of SCO's judgment on copyright issues to the audience.

More importantly, the traditional language a lawyer would expect
to find in a contract for transferring copyrights actually does not
appear in the SCO-Novell contract. Since lawyers try not to
transfer contracts accidentally, this appears to be deliberate.
Perhaps the parties intended to transfer some copyrights in the
future, but IBM does not believe that the current language of the
copyright performs this.

As mentioned many times before, there's a very strong
possibility that there are no existing copyrights to Unix as owned
by AT&T after the 1984 breakup. Again, the USL v. Berkeley
lawsuit was an embarassing trainwreck for USL. AT&T had paid no
attention to its confidentiality or the formality of copyright
laws. The company tried to enforce this copyright, but it had distributed
many copies of Unix without the license attached. Think of it as a
disregard for their copyright--if they have done that enough,
Unix would be known widely and USL would have little room to start
enforcing the copyright.

Mark then attacked the similarities to music copyright cases.
The ratio of a few seconds of melody found in a three-minute song
is immensely greater than the ratio of a few hundred lines of code
to a ten-million-line operating system. Even if this code does
infringe, it's hardly substantial--besides, Novell has waived the
violation.

IBM interprets Amendment X to mean that it can use the methods
and information it learns from Unix to make other operating
systems. IBM believes that it has done that. If so, the company's
position is very strong.

Mark then repeated that SCO has neglected its duties under the
GPL by trying to place additional restrictions (its licensing
fee, for one) to code already licenced under the GPL. This is
actually a copyright violation.

Worse, SCO has neglected its duty to its shareholders by
wasting millions of dollars on stupid cases instead of building a
viable business. In the end, SCO brought the case to a court of
law, not a court of magic. SCO needs to prove its case on facts
and the law but have failed to do so.

The end result was enlightening. While SCO's claims had always
seemed somewhat dodgy, I had never really understood how Byzantine
its claims were--especially in relation to its contract with
Novell.

On the other hand, as the question and answer session at the end
reinforced, it's uncommon for open source project leaders to make
sure that contributors have the right to make unencumbered
contributions to their projects. The initial paperwork to vet the
copyright of patches is daunting, but it may be legally necessary
for now.

Of course, as one questioner pointed out, it's very easy for
open source and free software to make its way into proprietary
products, never to be found. One large benefit of
publicly developing software--the transparency of the process--makes it easier for companies to claim potential (or real)
infringement.

The real solution will likely include continuing to fight bad
copyright, patent, and trade secret laws and judgments, working
with intellectual property lawyers who want to do the right thing,
and being very careful that copyrights on distributed code are very
clear.